Posts from January 2014

January 26, 2014

Lately, I have been getting a lot of questions about Healthcare.gov. People want to know why it cost between two and four times as much money to create a broken website than to build the original iPhone. It’s an excellent question. However, in my experience, understanding why a project went wrong tends to be far less valuable than understanding why a project went right. So, rather than explaining why paying anywhere between $300 million and $600 million to build the first iteration of Healthcare.gov was a bad idea, I would like to focus attention on a model for software-enabled government that works and could serve as a template for a more effective U.S. government.

Early in my career as a venture capitalist, we invested in Skype and I went on the board. One of the many interesting aspects of Skype was that it was based in Estonia, a small country with a difficult history. Over the centuries, Estonia has been invaded by many countries including Denmark, Sweden, Germany, and, most recently, the Soviet Union. Now independent but well aware of their past, the Estonian people are humble, pragmatic, and proud of their freedom, but dubious of overly optimistic forecasts. In some ways, they have the ideal culture for technology adoption: hopeful, yet appropriately skeptical.

Cue the violins. We're getting ready to take a tour of the world's saddest countries.

The Better Life Index maintained by the Organization for Economic Co-operation and Development (OECD) has updated its data and ranked its 34 member nations on measures such as "life satisfaction." We're counting those scoring poorly as the saddest countries (among those surveyed). Some of the findings might surprise you, while others might not.

First off, it's natural to wonder which countries ranked highly on life satisfaction, and part of the answer lies in Scandinavia. While Switzerland got top billing, among the top eight you'll find (in descending order) Norway, Iceland, Sweden, Denmark, and Finland. The Netherlands, Austria, Canada, and Mexico also fared well, with the U.S. in 16th place.

7 Nations WeepingBut on to the saddest countries. Here are the seven sad sacks, in descending order of sadness:

Hungary

Portugal

Greece

Turkey

Estonia

Russia

Italy

Why are the citizens of these countries so dissatisfied with life? There are lots of reasons. Economic issues can weigh a population down, for starters. The World Economic Forum has ranked many more countries, 148 in all, on global competitiveness, and Hungary recently ranked 63rd, while Portugal came in 51st, Greece 91st, Turkey 44th, Estonia 32nd, Russia 64th, and Italy 49th. (No. 1? Switzerland, again.)

When James and Maureen Tusty went to the Eastern European country of Estonia in 1999, they hadn’t heard of its singing revolution. Nor had many of their friends. In fact, it seemed the story hadn’t left the Baltic region at all.

But it was a story that blew the couple away, thanks to a combination of its immensity and Estonians’ quietness about it. From the mid-1980s to the early 1990s, its residents gathered to sing protest songs in massive, nonviolent demonstrations, imploring the Soviet Union to grant the country independence.

“We just felt really compelled to make the film,” James Tusty said. “If not now, when, and if not us, who?”

The Tustys were in Estonia to teach filmmaking; they decided to make a film about the events. The Singing Revolution was released in the United States at the end of 2007, and the Tustys will be on hand for a Saturday screening at the Billings Farm & Museum in Woodstock at 3 p.m. It’s part of the 4th Annual Woodstock Vermont Film Series, which will run through April.

James Tusty gave three reasons for the obscurity of the story:

∎ Estonia is a small country. Official statistics put its 2012 population at 1.3 million, approximately the same as New Hampshire.

Until now the ferry has been in the Swedish registry. The festive event will start in the A terminal at 1.30 pm today.

Viking Line has not said how big a cost-saving effect the move would bring, but a year ago when the company started to consider the flag-change, Mikael Backman, CEO of Viking Line, estimated that the company may save up to 40% in labour expenses by the flag-change.

This means that annual saving could amount to about EUR 1m. One reason that is forcing Viking Line to consider the flag-change is the difference of the average salary in Estonia and Finland.

Viking Line’s main competitor Tallink has an edge in the fierce fight over passengers in Tallinn-Helsinki route due to having lower labour costs although it is now in bitter dispute with the Estonian trade union of seamen that is demanding between 15 and 20% pay rise.

Estonian foreign minister Urmas Paet said that Thailand is a popular tourism destination for Estonian people and getting the visa-freedom was preceded by years of work.

"Hopefully visa freedom will help, in addition to developing tourism relations and contacts between people, also promote economic and culture ties between Estonia and Thailand," said Paet.

The ministry warns though that currently people should be careful travelling to Thailand because of protests and tense political situation in Bangkok. Estonian citizens can travel visa free to more than 100 states now.

The “Freedom to Zarenkov!” Public Committee, set up by the international community to protest against the arrest of the Estonia Without Nazism group leader Andrei Zarenkov, made its first statement on Monday, January 20th.

The Committee of NGO leaders and activists, as well as reporters from different countries points out in the statement that they see the arrest on January 4th and the subsequent six-month incarceration of Andrei Zarenkov, who is also known as the informal leader of Russian-speakers in Estonia, on allegations that he had taken bribes to the tune of 1,000 Euros, as an overt provocation by Estonian security services.

Zarenkov was notably arrested shortly after his group held an international human rights conference in Tallinn, after they accused the Estonian security police of bringing pressure to bear on the country’s civil society and exposed the Estonian government’s policy of discrimination against ethnic minorities and the glorification of Nazism.

Andrei Zarenkov thought of running for the European Parliament during the next election, which raised the ire of some Estonian officials, including the Defence Minister of the Baltic country.

The growth of revenues by 13.6 mln euros year-on-year was based on rental income from icebreaker Botnica as well as increase of traditional port fees and housing rights, said AS Tallinna Sadam finance manager Marko Raid.

In 2013 as a whole, Tallinna Sadam serviced 28.2 million tonnes of cargo, by 4.2% less than in 2012. The fall was caused by the fall of solid bulk goods while container cargo volume reached a record level, growing by a tenth.

The number of passengers who used the ports managed by the Tallinna Sadam grew by 4.5% in 2013 to a record 9.2 million year-on-year. The growth was motored by increase of number of regular route passengers on the Tallinn–Helsinki route as well as the increase of the number of cruise passengers to the record nearly 530,000 passengers.

The company's EBITDA was 67.8 million euros, growing by 13% in a year. AS Tallinna Sadam paid last year as dividends to the state budget 25.3 million euros, plus 6.7 mln euros of income tax on dividends.

The German air carrier Lufthansa has once more named the passenger and aircraft ground handling provided by Tallinn Airport Ground Handling the most punctual in the world, reported BC Tallinn Airport.

Lufthansa evaluates ground handling at airports by measuring the on-time record of flight departures, the speed and punctuality of checking in for flights, efficiency of luggage searches, convenience when boarding planes, fulfilment of safety requirements, and many other details in services for airplanes and passengers. According to the air giant Lufthansa, which published the service quality results late last year, the Best Ground Handling Provider 2013 is AS Tallinn Airport GH, a subsidiary of Tallinn Airport.

After five plus years, AS Tallinn Airport GH once more earned also the SHOOTING STAR title, awarded to airports employing the most up-to-date solutions for checking in for flights. At Tallinn Airport, self-service kiosks, the Internet and mobile phones are used for checking in for Lufthansa flights by 92.4% of the passengers, the best such indicator in the world.

Moody’s Investors Service announced on Tuesday that it downgraded to Baa2 from Baa1 the issuer rating and the senior unsecured ratings of Estonia's state-owned energy giant Eesti Energia AS, informs LETA.

Concurrently, Moody’s has affirmed the short-term P-2 rating of Eesti Energia. The outlook on the ratings is stable.

Moody’s said that the rating action reflects the development of Eesti Energia's business risk profile in light of the increasing integration of the Baltic and Nordic power markets, coupled with generally weak levels of wholesale power prices and challenges associated with the development of shale oil activities.

While Eesti Energia's rating is underpinned by the group's dominant position in Estonia as a vertically-integrated utility, the company's small scale and concentration on its CO2-intensive oil-shale-based generation portfolio constrain its rating, Moody’s said. In the short term, Eesti Energia's hedging strategy will help protect its earnings from the effects of weak power prices. Moreover, the company will further benefit from the current low CO2 prices. However, Moody’s considers that the competitive position of Eesti Energia's oil-shale-based generation assets may weaken over time as the market becomes more integrated with the Nordic region, which has a more diversified generation base. This integration will follow the coming on line of the Estlink2 additional cable connection to Finland this year.

Mobile handest sales in units totaled 48,700 in Estonia in December 2013, according to a study from GfK Retail and Technology. Sales grew by 54 percent month-on-month.

A total 400,000 new handsets were sold in Estonia in 2013. In December, 14,600 conventional handsets and 34,100 smartphones were sold in Estonia, and the average retail price was EUR 203 across the country.

Mobile operator Tele2 Estonia said that the average price was EUR 171 in its shops. Handsets from Samsung were the most popular at Tele2 shops. LG also increased its market share, while the market share of Nokia declined.

Finance Minister Jürgen Ligi, who delivered a report on Estonia's participation in ESM, said that ESM will achieve its maximum ability, 500 billion euros, in spring.

In 2012 and 2013, financial stability support has been granted via ESM to two states, Spain and Cyprus. The Spanish programme ended in December and its size was 41.3 bln euros eventually. The initial promise was to lend up to 100 bln euros but aims were achieved sooner. In Spain, recapitalisation of banks with support loans was supported.

The support to Cyprus is more widespread and 9 bln euros of ESM funds have been earmarked for it, of which 4.6 bln has been paid.

A total of 39,631 crimes were registered in Estonia in 2013, around 3 percent less than at the same time last year, new figures show.

New figures from the Estonian justice ministry show how the structure of crimes didn’t change considerably as compared to a year earlier: crimes against property formed 54%, crimes against persons 18% and traffic crimes 9 percent

Among crimes against property (21,321, a fall by 1,479), the most widespread were thefts (16,465, fall by 2,163) and fraudulence cases (2,451, growth by 769).

The number of crimes against people grew by 204 to 6,956. Around 62 cases of serious crimes against persons, murders and manslaughters were registered, by 18 less than at the same time last year.

According to the so-called empty pack study of market research company Nielsen, the share of smuggled Byelorussian cigarettes is increasing in Estonia while the share of illegal Russian cigarettes is falling, LETA/Public Broadcasting reports.

According to the regular "empty pack study", 20.7% of packages of tobacco products found in Estonia have foreign tax labels and health warnings on them. The majority of the cigarettes that lack Estonian tax labels originate from Byelorussia and Russia.

The share of illegal goods has decreased evenly though in all problematic towns and the pan-Estonian illegal market has decreased by 3.3 percentage points as compared to an identical study in the first half of last year.

Illegal cigarettes are consumed most in Kohtla-Järve (48% of empty packs), Narva (43.5%), Sillamäe (41%), Maardu (40%), Valga (39%) and Jõhvi (38%). The study took place in September and October last year in 14 Estonian towns and cities.

The Estonian Public Broadcasting (ERR) reported Paet received the confirmation from his Russian counterpart Sergei Lavrov in a telephone conversation on Thursday. The time of signing remains to be decided for which Lavrov is invited, said the Estonian foreign minister.

An earlier report quoted Estonia's University of Tartu political scientist Karmo Tuur as saying the treaty remained unsigned in 2013 because Russia's focus was on Syria and Ukraine.

Estonia and Russia were on the verge of signing a border treaty in 2005, but Russia withdrew its approval at the last minute. Talks on the treaty reopened after October 2012, said the ERR.

Estonia's economy minister proposed to Finland that the two countries, which have been competing over which will host a new liquefied natural gas (LNG) terminal, compromise by building one each, Finnish daily Kauppalehti reported on Friday.

Economy Minister Juhan Parts suggested that both sites be big enough to handle offloading LNG ships, according to the report. Parts also proposed they could manage the extra costs by delaying planned construction of an undersea gas pipeline connecting the two countries by five years, the report said.

Analysts, however, say that the region's gas demand only warrants one LNG import terminal - expensive plants both in terms of construction costs and gas import prices. A single LNG terminal is estimated to cost around 500 million euros ($680 million) and provide an alternative to gas supplies from Russia. A pipeline that would allow Finland and Estonia to share the imports would cost around 100 million euros.

The European Union (EU) could fund up to 40 percent of the cost of a regional terminal provided it serves the interests of more than one country, and there are several Baltic Sea states that are vying for funds. The EU is expected to announce a winner next June, and a study last November showed that Finland would be a strong contender. Lithuania, the biggest Baltic state, plans to start importing LNG in 2015 through a floating terminal.

Finland and the three ex-Soviet Baltic states of Estonia, Latvia and Lithuania consume about 10 billion cubic metres of gas per year, all of which is currently supplied by Russia's Gazprom.

According to a procurement signed already, 16 new modern trams will be bought from Spain for revenues from selling excess pollution quota.

Money was gained for the purchase of additional 4 trams from residues of contracts concluded with Spain that emerged in connection with the change of investment plans, environment ministry spokeswoman Berit-Helena Lambi said.

The new trams, produced by the Spanish CAF company, will ride in the 3rd and 4th tram lines in Tallinn.

Before the new trams are introduced, the tramways of these lines will be reconstructed this and next year. In addition to trams, three new city buses operated by natural gas will be bought and these go to Pärnu.

Eurostat revealed on Jan. 16 that prices in the euro area increased by 0.8% on average in a year whist in the EU the increase was at 1 percent.

In Estonia the price increase was 2%. Prices in the UK and Austria grew by the same amount, reports public broadcasting.

As compared to other euro area states, Estonia has been the price increase leader since joining it as only in a few months, some other state has been on the top position.

At the international level, harmonised consumer price index (HCPI) is compared. Estonia's consumer price index (CPI) grew by 1.4% in December year-on-year and the inflation was that low three years ago most recently.

In an interview to Kuku raadio last week Klandorf said that Nimeta Baar and its owners and managers are promoting rowdiness that is not typical for Estonia.

The lawyer representing Nimeta Management said that it’s extremely sad that the Deputy Mayor made such a referral to the nationality of owners of Nimeta Baar, claiming that the bar is promoting British culture of massive drinking and rowdiness.

Owners of Nimeta Baar find that Klandorf has violated the section of the Estonian Constitution which says that no-one should be discriminated according to their nationality or social position, added the lawyer.